DOES CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE HAVE A ROLE IMPROVE FINANCIAL PERFORMANCE? A PANEL DATA APPROACH

Abstract

The purpose of this study is to explore the effect of Corporate Social Responsibility disclosure on financial performance in Indonesia. Profitability and liquidity are used as the main indicators in measuring financial performance. The sampling technique used in this research is purposive sampling. The research sample is companies listed on the Indonesia Stock Exchange. As a population, there are 721 companies listed on the Indonesia Stock Exchange in 2020. During the 5-year study period, 194 companies met the requirements, with a total of 970 observations. Data collection is done by documentation method and literature study. The data analysis technique used is panel data regression using Eviews 9. Based on the results of the study, CSR disclosure has a significant effect on ROA, ROE, and ROI. In addition, CSR disclosure significantly affects QR and Cash R but does not affect CR. Our findings contribute to introducing a key variable, CSR disclosure, to explain its ability to improve financial performance (profitability and liquidity). We suggest that companies evaluate the effectiveness of CSR activities on the company's financial performance.